The World Bank: Financing the Future or Living in the Past?

At a recent conference, World Bank President Jim Yong Kim declared, “No country – rich or poor – is immune from the impacts of climate-related disasters…At the World Bank Group we are stepping up our mitigation, adaptation and disaster risk management work.”

By conducting research on shifting climate patterns and the implementing projects designed to help poor communities adapt to extreme weather events, the World Bank has demonstrated leadership on the issue of climate change.

Nevertheless, between a coal-fired power plant in Kosovo and a copper mine in Mongolia, the Bank is moving forward with several projects that are likely to damage their surrounding environment, and has yet to demonstrate full commitment to the sustainable alleviation of poverty.

Kim has been vocal about his desires to address climate change in World Bank funded projects. His emphasis is appropriate: as president of the World Bank, he is responsible for development projects that aid the world’s poorest, who also happen to be those most vulnerable to climate change. In calling for the world’s political and economic elite to provide leadership in the battle against climate change, he is implicitly placing the burden on those most responsible for it in order to ensure a healthy future for the next generation.

Commendably, the World Bank funds a variety of projects to mitigate and adapt to the changing climate, ranging from light bulb efficiency to solar power to safety nets in response to extreme weather events. It also provides extensive data and analysis on climate change, which serve as an important resource for policymakers and experts. Such research includes the Bank’s recent Turn Down the Heat, Why a 4°C Warmer World Must Be Avoided, a bold report that draws clear attention to the reality that humanity is currently heading toward a future that’s 4 degrees Celsius warmer, one in which we are more likely to confront natural disaster after disaster.

While Kim’s climate change rhetoric provides reason to be optimistic, it may be diverting attention from other, less climate-friendly World Bank projects. In an interview at the World Economic Forum in Davos, which can be viewed below, Kim outlines three major approaches to the mitigation of climate change that he hopes to adopt in his tenure: setting the correct price and developing a global carbon market, removing fossil fuel subsidies, and developing green planning strategies for mega-cities. These are three ambitious goals, and are certainly easier said than done. Herein lies a theme that runs throughout much of Kim’s rhetoric. In that same interview, he explains that he hasn’t signed off on any coal-fired power plants and hopes to avoid doing so in the future, acknowledging that energy development needs to be focused on more sustainable resources. When pressed, however, he admits that “[his] first priority is helping countries have the energy they need” for the sake of poverty reduction.

Indeed, the World Bank is currently pushing forward with plans to open a coal-fired power plant in Kosovo, against local opposition. Besides the obvious issue of emissions, the plan will draw water from a system that is already stressed, which may lead to even more water limitations in a country currently facing shortages. Additionally, the plant would endanger Kosovo’s entrance into the European Union, as it would make it difficult for the state to implement EU energy and environmental legislation. While Kim was not at the helm when this project began, he is now, and could certainly influence its construction.